HP-12C WACC Company
Computes WACC Weighted Average Cost of Capital by HP-12C with debt and equity proportions.
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HP-12C WACC — Weighted Average Cost of Capital
WACC mixes the cost of equity with the after-tax cost of debt, weighting each by its share of the capital structure: WACC = (E/V)·Ke + (D/V)·Kd·(1-T) where E/D are the market values of equity and debt, V = E+D, and T is the tax rate. Ke comes from CAPM: Rf + β·(Rm-Rf). To give a sense of scale, Petrobras runs around 12-14% in Brazil, Vale closer to 10-12%, and banks are handled through the Ks model.
In a DCF, WACC is the rate you use to discount unlevered free cash flows. Feed it market values (não contábeis), the current yield-to-maturity for debt, and a CAPM beta pulled from Bloomberg or Refinitiv. This shows up in CFA Level 2 Equity and in Damodaran's "Investment Valuation" 3rd ed.
Applications
DCF valuation, the hurdle rate in capital budgeting, an EVA/ROIC benchmark, dividend policy, and share buyback decisions.
FAQ
Book value or market value? Sempre market, já que o book underestima Ke historicamente.
Pre-tax or after-tax Kd? Após impostos, porque interest is tax-deductible (juros economizam IR).
WACC para empresa privada? Use comparáveis públicas (peers) ou a industry average from the Damodaran dataset.
Related Tools
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HP-12C ROIC Investment
Computes ROIC Return on Invested Capital of project by HP-12C net profit over capital.
HP-12C Dividend Yield
Computes Dividend Yield of typical Brazilian stock by HP-12C dividends over share price.
HP-12C CAPM Stock
Computes expected stock return by CAPM HP-12C given risk-free rate beta and premium.
HP-12C EVA Project
Computes EVA Economic Value Added of project by HP-12C residual profit over capital with WACC.
The results provided by this tool are for general informational and educational purposes only and do not constitute professional, financial, medical, legal, tax or accounting advice. Always confirm important decisions with a qualified professional and official sources.